Goldman Sachs launched a platform for rich people to buy private companies. Not rich like your uncle who retired early. Rich like family offices and dentists who think they're venture capitalists because they own a Tesla.
The target? SpaceX and Stripe. Because nothing says sound investment strategy like chasing two companies that every idiot with a Morgan Stanley app has been talking about for six years.
Goldman figured out wealthy clients want direct stakes in private companies. Direct stakes. As if the previous method was what, carrier pigeon? Smoke signals? They already had access. Goldman just repackaged it with a new logo and called it innovation.
This is for people who got bored watching their index funds go up. They need the thrill of illiquidity. They crave the rush of not knowing what their investment is worth for eighteen months at a time. They want to tell people at cocktail parties they own a piece of the next big thing, right before that thing files for bankruptcy or gets acquired for spare parts.
The platform gives wealthy clients exposure to alternative investments. Alternative to what? Making money? Because private markets have this funny habit of looking genius during bull runs and catastrophic during liquidations. But Goldman knows its audience. These are people who think diversification means owning both a beach house and a mountain house.
Here's what happens next. Wealthy clients pile in. They buy stakes in companies with $47 billion valuations based on revenue projections written in crayon. The companies stay private for another decade because why go public when you can keep raising money from Goldman's clients at whatever price you want? Then either the company becomes the next Apple or it becomes the next WeWork, and in both cases Goldman collects fees.
The dentists, meanwhile, get to brag about their SpaceX position while filling cavities and wondering why their accountant stopped returning calls.
Photo by on Unsplash
Leave a Comment